Digital video sales have overtaken sales of content on physical media for the first time in the UK, according to new figures released by the Entertainment Retailers Association (ERA).
British households spent £6.3 billion in home entertainment, which includes video, music and video games, in the last year with spending on digital formats increasing rapidly.
For digital video, which include subscription streaming services like Netflix, sales increased by more than 20 percent to £1.3bn, compared to sales on physical media which fell by more than £150m to £943m.
Growth in digital video sales was largely driven by streaming services such as Netflix and Amazon, with an estimated quarter of British households now having a Netflix account.
Overall, video sales increased by 2.2 percent.
The revival of the music industry continues apace with revenue growing at 4.6 percent in 2016. Again, streaming led the way and more than helped to make up for the continued losses in CD sales. While the music industry is recovering, revenue figures are still at just over half of what it used to be during the height of the CD days, in 2001.
Video gaming sales saw a 2.9 percent growth, and with £3bn in revenue, it is now nearly half of all home entertainment revenue. This is the only sector that seems to not have been affected by the digital evolution.
Responding to the latest figures, ERA chief executive Kim Bayley highlighted the importance of investing in innovation in order to not be left behind by the digital evolution.
"To have added over £1bn in new revenues in just four years is an incredible achievement. To put it another way, take away today’s digital services and the entertainment market would be barely a third the size it is today," said Bayley.